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Ethics
An ethical dilemma is a situation that offers potential benefit or gain and that may also be considered unethical (Schermerhorn, 2011, p.58). I define an unethical situation as one in which I have to do something I don’t feel good about (Esmé, 2009). Some examples of ethical dilemmas that managers face include Discrimination, Sexual harassment, Conflicts of interest, Product safety, Use of organizational resources and etc. (Trevino, 2006. DeGeorge, 2005). Let’s choose ethical courses of action considering personal factors, the situational context, organizational culture, and the external environment in Kay Smith’s case and Marty Jose’s case below.

Kay Smith’s case
Kay Smith is one of your top-performing subordinates. She has shared with you her desire to apply for promotion to a new position just announced in a different division of the company. This will be tough on you since recent budget cuts mean you will be unable to replace anyone who leaves, at least for quite some time. Kay knows this and, in all fairness, has asked your permission before she submits an application. It is rumored that the son of a good friend of your boss is going to apply for the job. Although his credentials are less impressive than Kay’s, the likelihood is that he will get the job if she doesn’t apply. What will you do?

In this case, Kay Smith wants to apply for promotion to a new position of the company. I will be unable to replace her for a while and her sudden turnover will create a temporary vacuum in my division’s work. It will negatively affect my work and my company. That will create a clear conflict of interest not only between me and her, but also between shareholders and her. Then should I prevent her to apply for the job?
She and the son of a good friend of my boss are going to apply for the job. His credentials are less impressive than Kay’s. Therefore she seems better suited for the job and her taking the job will be better for the good of the company. In a way it’s a conflict of interest between my need and the company’s need. Then should I permit her to apply for the job? If I prevent her do that, it seems like I’m unfair and it’s against free competition.
Almost all of managers need competent people. I’ll suffer from business paralysis without her. The manager of the new position wants to select the better human resource of course. Both I and the manager of the new position need her. That will create a clear conflict of interest between me and the manager, too. It’s the ethical dilemma associated with Conflicts of interest. A conflict of interest is a set of circumstances that creates a risk that professional judgment or actions regarding a primary interest will be unduly influenced by a secondary interest (Lo & Field, 2009). There are several ways to mitigate conflicts of interests; Removal, Disclosure, Recusal, Third-party evaluations, Conclusion, etc. Which way should I take?

There is a checklist for dealing with ethical dilemmas. Step 1: Recognize the ethical dilemma. Step 2: Get the facts. Step 3: Identify your options. Step 4: Test each option: Is it legal? Is it right? Is it beneficial? Step 5: Decide which option to follow. Step 6: Double-check your decision by asking these two follow-up questions: “How would I feel if my family finds out about my decision?” “How would I feel if my decision is printed in the local newspaper?” Step 7: Take action (Schermerhorn, 2011, p.59). Let’s solve this problem following the checklist.
There are many conflicts of interest. The subject is important and affects us all, including me. I have three options: I will permit her to apply for the new position. Or I will prevent her to do that. Or I will recuse myself from this case and leave the decision to the option of my superior or third party. If I conclude this case, it will be illegal. Because I have duty of good faith in law and in the contract of engagement. I must act in the interests of the company and avoid the appearance of a conflict of interest. Therefore I think that I must recuse myself from this case. Because a conflict of interest between me and the company will arise in some spheres. If the new position is very important to the interest of the company, her taking the job and my suffering from lack of human resource will be better for the good of the company. If my decision of recusal is opened to my family and the public, I’ll have a clear conscience and I’ll have done nothing to be ashamed of. So I’ll leave this decision to my boss or some third party.

I will recuse myself from this case and leave the decision to the option of my superior.
 To fulfill my duty of good faith in law and in the contract of engagement.
 To avoid the appearance of a conflict of interest.
 To bring the more fair and better result.
The superior of both me and the manager of the new position will decide whether she will be able to apply for the position. If the superior prevents her to do that, I’ll get on with living a normal company life with her. And she will have no hard feelings towards me. Because the abnegator will be not me, but the superior. If the superior permits her to apply for the position, I must find a substitute worker. I will seek a bigger departmental budget to employ a new worker. And I’ll ask workers of other departments be sent in to help me. If the son of a good friend of my boss fails to get the position, I will be able to suggest him to work with me and replace with him.

Marty Jose’s case
Marty Jose got caught in a bind. She was pleased to represent her firm as head of the local community development committee. In fact, her supervisor’s boss once held this position and told her in a hallway conversation, “Do your best and give them every support possible.” Going along with this, Marty agreed to pick up the bill (several hundred dollars) for a dinner meeting with local civic and business leaders. Shortly thereafter, her supervisor informed everyone that the entertainment budget was being eliminated in a cost-saving effort. Marty, not wanting to renege on supporting the community development committee was able to charge the dinner bill to an advertising budget. Eventually, an internal auditor discovered the charge and reported it to you, the personnel director. Marty is scheduled to meet with you in a few minutes. What will you do?

On the instruction of her supervisor’s boss, Marty Jose agreed to pick up the bill (several hundred dollars) for a dinner meeting with local civic and business leaders. There are many rules about purposes, process, limit, account titles, delegation of the company's budget (Akinyemi & Jin, 2007). I’ll check according to the audit checklist whether she obeyed the budget rules or not (Pfannerstill, R. 2005). If she violated the regulations, she will be punished in accordance with the company rules. Even if she followed directions of her supervisor’s boss, she is guilty of the regulation violation.
Let’s suppose she obeyed the rules. After she picked up the bill, is it right to reduce the budget afterwards? Generally the feeling is a retroactive rule, in effect an ex post facto law. We must not apply a rule retroactively. It’s not fair to convert legal acts to illegal acts retroactively.
When her supervisor informed everyone that the entertainment budget was being eliminated in a cost-saving effort, did she make a report on this matter? Did she discuss superiors about this problem? Did she check whether the reduction of the budget would be applied to this case retroactively or not? If she reported and discussed on this matter, it will greatly lighten her burden. If she didn’t do that, she maybe violated duty to report. I’ll check whether she obeyed rules about obligation of financial reporting or not.
And also I’ll check whether the reduction of the budget would be applied to this case retroactively or not. If it would not be applied to this case retroactively, she should not redirect a portion of the budget from entertainment to advertisement. Her diversion is her mistake and I’ll recommend her to adjust the error and ensure such an error does not happen again.
If it would be applied to this case retroactively, she had no option but to redirect a portion of the budget from entertainment to advertisement. Because the money already paid is irretrievable commonly. I’ll check whether she obeyed the rules about diversion of budget or not.

This case is the ethical dilemma about use of organizational resources. This ethical budget dilemma could be avoided simply by planning ahead and explaining how to handle of budget already used. Therefore the superiors are somewhat more responsible than her. After I check whether she obeyed the rules about the company’s budget or not, it will become known that she obeyed all the rules, then it’s all good. If she broke the rules, I’ll investigate the causes of the breach. If she didn’t know the rules, I’ll carry out rules and ethics education. Ethics training is useful. It seeks to help people understand the ethical aspects of decision making and to incorporate high ethical standards into their daily behavior (Schermerhorn, 2011, p.64).
In this case, it seems like that she didn't do it to intend anything bad. I’ll see if she can compensate the defect or obtain expost facto approval. If possible, I’ll make her to do that. If it’s not possible, I may have to take some disciplinary action by the company rules. But the amount (several hundred dollars) is relatively minor, so she will be punished lightly. I’ll check whether the superiors obeyed the rules or not, too. Because employees who violate ethical rules should be disciplined, regardless of rank or status within the company.
I’ll deal with this case quickly. Then other employees may not have any desire to take part in unethical behavior, seeing rules go enforced and my efforts to institute ethical budgetary procedures.

It is very important that people comply with the accounting rules of the company. Or employees may run away after pocketing company funds. It will harm the stakeholders’ interests. So companies should have detailed rules about budgets and make them to be obeyed by all employees.
 I’ll check whether she and her superiors obeyed the budgeting rules or not.
 In turn I’ll take immediate action following the company rules.
 In the circumstances, I’ll punish them lightly.
 I’ll make ethics training for employees mandatory.

In Kay Smith’s case, I will recuse myself from this case to avoid a conflict of interest between me and the company. And I’ll leave the decision to the option of my superior or some third party. In Marty Jose’s case, I’ll check whether she and her superiors obeyed the budgeting rules or not. In the circumstances, I’ll punish them lightly. And I’ll make ethics training for employees mandatory.

References
Akinyemi, J. A. & Jin D. (2007). Financial Audit Systems Modeling- A Formal Specifications Approach. VDM Verlag.
DeGeorge, R. (2005). Business Ethics, 5th ed. Englewood Cliffs, NJ: Prentice-Hall.
Esmé, E. Deprez, “Madoff Sentenced to Maximum 150 Years,” Business Week ( June 29, 2009): businessweek.com (accessed April 15, 2010).
Lo, B. & Field, M. J. (2009). Conflict of Interest. Washington, D.C., the National Academies Press.
Pfannerstill, R. (2005). The Progressive Audit. Asq Pr.
Schermerhorn, Jr, & John, R. (2011). Management, 11th Edition. Hoboken, NJ: John Wiley & Sons, Inc.
Trevino, L. K. & Nelson, K. A. (2006). Managing Business Ethics, Hoboken, NJ: John Wiley & Sons.

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